Wednesday, 15 of August of 2018

Economics. Explained.  

Consumer Confidence

August 1, 2018

The Conference Board reported that consumer confidence rose 0.3 point in July to 127.4 after having fallen 1.7 points in June.   The February level of 130.0 was an 18-year high (highest since November 2000 — 132.6).

Lynn Franco, Director of Economic Indicators at the Conference Board said,  “Consumers’ assessment of present-day conditions improved, suggesting that economic growth is still strong. However, while expectations continue to reflect optimism in the short-term economic outlook, back-to-back declines suggest consumers do not foresee growth accelerating.”

Confidence data reported by the Conference Board are roughly matched by the University of Michigan’s series on consumer sentiment.   As shown in the chart below, trends in the two series are identical but there can be month-to-month deviations.   Any way you slice it, confidence remains at levels not seen since the early 2000’s.

The consumer should continue to provide support for overall GDP growth in 2018.  The S&P 500 stock market index, the Russell 2000 and the NASDAQ Composite are all at essentially record high levels.  Home prices continue to climb.  Consumer net worth is at a record high level and rising.  Jobs are rising by about 190 thousand per month.  The unemployment rate is falling slowly. The consumer has little debt.  Interest rates remain low.  In addition, consumers will get a cut in income tax rates in 2018.  Clearly, the consumer’s optimism is valid.

We anticipate GDP growth of 3.0% in 2018.

Stephen Slifer


Charleston, SC

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